Thyssenkrupp unions fear loss of rights in Tata deal structure

Reuters Staff

2 Min Read

BERLIN (Reuters) - Labor bosses at Germany’s Thyssenkrupp (TKAG.DE) said workers’ legal say in strategic decisions at the corporate level could be diluted in the planned holding structure for the new venture with India’s Tata Steel (TISC.NS).

A man wears a helmet with glasses attached during a Thyssenkrupp steel workers protest rally in Bochum, Germany, September 22, 2017, against the planned combination of the group's European steel operations with those of Tata Steel. REUTERS/Wolfgang Rattay

The two firms agreed last month to merge their European steel operations to create the continent’s second-biggest steelmaker after ArcelorMittal (MT.AS) with combined sales of about 15 billion euros ($17.55 billion). The venture would be based in Amsterdam.

Unions at Thyssenkrupp have opposed the deal and are concerned more steel jobs may go in the long term in addition to as many as 4,000 job losses already announced as part of the merger.

In a statement published late on Thursday, the German group’s works council welcomed a pledge by chief executive Heinrich Hiesinger to stand by workers’ so-called co-determination rights but were skeptical about how this would play out under the joint venture’s future holding structure.

Co-determination in the coal and steel industries gives equal numbers of labor and capital representatives on company supervisory boards and is seen as key to winning over workers.

“What worries us is that through the planned move of the holding (company) of a potential joint venture to the Netherlands, existing co-determination structures in the group will be undermined,” labor leaders said.

“The strategic decisions that are taken in such a holding (company) would in this case be largely removed from the legitimate exertion of influence by labor representatives, staff leaders and unions,” they said, adding that preserving co-determination in a future venture with Tata would be their “fervent wish.”